KARACHI: Both black and white oil volumetric sales declined during five months (July-November) with overall oil market companies (OMC) volumes clocking in at 7.69 million tons as compared to 11.31 million tons sold in the corresponding period last year, exhibiting a hefty decline of 32 percent.
With regards to monthly sales, petrol, oil lubricants (POL) volumes fell 33 percent YoY and 22 percent MoM to 1.28 million tons in November 2018, latest number issued by Oil Companies Advisory Committee (OCAC) suggests.
Furnace oil (FO) sales volumes continue to exhibit significant decline and fell 68 percent in five months, whereas monthly FO sales were also 70 percent YoY and 52 percent MoM lower in November 2018, as country’s power generation mix shifted to other fuel sources i.e. coal & RLNG, and FO demand curtailed significantly. “Going forward, high base-effect pertaining to FO volumes will remain the predominant factor behind lower POL volumetric growth in the country,” Muhammad Nabeel at Pearl Securities said.
In white oil segment, Motor spirit (MS) sales exhibited meager decline of 3.0 percent at 3.04 million tons during five months, whereas November 2018 MS volumes clocked-in at 0.52 million tons down 8.0 percent YoY and down 16 percent MoM.
Moreover, High-speed diesel (HSD) sales declined 20 percent during five months, whereas November 2018 HSD sales were also considerably lower from previous year’s level; down 32 percent YoY and down 20 percent MoM. “Higher domestic POL prices coupled with increase in smuggled Iranian fuel led to the overall reduction in retail fuel volumes during five months,” Nabeel added.
PSO volumes declined 51 percent to clock in at 3.11 million tons in five months primarily due to significant fall in FO sales as the state-owned oil giant sold only 514k tons of FO versus 2.87 million tons in the same period last year. “PSO is continuously facing competitive pressure from other OMCs where its market share during five months in all major fuels i.e. FO/MS/HSD has declined by 33pps, 5pps and 7pps, respectively.
Attock Petroleum (APL)’s oil sales during five months clocked in at 818k tons, down 9.0 percent. However, APL still managed to lift its overall market share by 2.6pps to almost 11 percent during the period. HASCOL’s overall volumetric sales arrived at 944k tons, down 23 percent during five months.
Going forward, with arrival of winter season impacting POL demand, analysts anticipate volumes to remain on the lower side. “Moreover, with international oil prices exhibiting a significant decline from $85/bbl peak and the government already having reduced POL prices for MS/HSD by Rs2.0 for December 2018, any further reduction in retail fuel prices will widen pricing differential with CNG & provide some support to POL demand,” a comment issued by Pearl Securities noted.